Scrutinising Government’s Budget In An Election Year

Louis
Collins

Budget week wrapped up over a
fortnight ago, but Parliament’s job of scrutinising
the government’s spending plans is far from
finished.

The first week of the June sitting block is
Scrutiny Week, a twice-yearly fixture in Parliament’s
calendar when MPs and ministers are expected to be in
Wellington, but the House doesn’t sit.

There are no
legislative debates and there is no Question Time. Instead,
attention shifts to one of Parliament’s other core
functions: holding the government to account for how it
spends public funds.

While the December round of
scrutiny focuses on annual reviews, looking back at how
departments and agencies performed during the previous
financial year, the June round focuses on the Estimates –
Treasury parlance for the spending plans contained in the Budget
and delivered by the Finance Minister just a few weeks
ago.

One unusual quirk of this particular Scrutiny
Week is that it is the last of the 54th Parliament. To
unpack that, and to understand how Parliament’s financial
scrutiny works, I spoke with Clerk of the House David Wilson
and Clerk Assistant James Picker.

An Endless
Cycle

As Budget week fades into the rear view mirror,
Parliament’s financial scrutiny process continues.

“It
never really stops,” Wilson said.

“It’s an ongoing
cycle of approval of spending, spending, review of that
spending, planning for the next financial year, and approval
of that, and on and on it goes.

“Parliament really is
involved in most of those parts. The government does the
planning and presents what it would like to spend to
Parliament. Parliament then decides whether it can or
not.”

Wilson said people often imagined the Budget as
a single annual event, with all its anticipation and
fanfare, but it took months to pass.

“The Budget,
although it applies for a financial year, won’t actually be
finished by the start of the new financial year on 1 July,
because the Budget is actually not a distinct process, it is
a piece of legislation. It’s an Appropriation
Bill.

“It just takes quite a long time to pass
compared to most bills, and it gets more scrutiny than
most.”

Because of the need to keep things running
while this scrutiny is taking place, Parliament grants a
temporary authority.

“Parliament gives the government
an interim authority to spend money,” Wilson said, “which is
called Imprest Supply.

“It needs to do that a couple
of times a year because the financial year and the Budget
cycle don’t completely line up, and they never
have.”

Scrutiny in an Election Year

With
Parliament scheduled to rise in September for the campaign
period leading up to the election, this will be the final
Scrutiny Week of the 54th Parliament.

Picker said that
scrutiny of ministers “takes on an extra element in an
election year”.

“They’re also thinking about how they
hand over to who comes into the next parliament… so what
areas do they particularly want to scrutinise? What areas
are ongoing areas of concern for them or areas to highlight
that they want to hand over to the MPs that follow them on
the committees that come in the 55th
Parliament?”

“Whilst the House will pause briefly for
an election, we’ll be back towards the end of the year and
we’ll pick up those conversations with departments and
ministers all over again.”

The year’s second Scrutiny
Week, which looks at annual reviews, is scheduled to start
on November 30. However, the official election result isn’t
due until November 27, so Parliament is unlikely to be
sitting.

Picker said when a new Parliament forms, it
would decide on a sitting calendar and how “it wants to
operate, [and how it wants] committees to
operate”.

“But the bulk of the scrutiny that
committees would ordinarily do in… November and December
may well be slightly moved. It’s not unusual for new
Parliaments to do a lot of that work early in the new
calendar year.”

If different parties are in government
for the 55th Parliament, former ministers from the 54th
Parliament will have the unusual prospect of scrutinising
decisions they were once responsible for.

“Members
pick up the role they have when they start the new
Parliament,” Picker explained.

“If governments change
and you’ve got a new role, then your responsibility as a
member of a committee is to pick up that scrutiny and look
at it from the perspective of your particular
viewpoint.”

After changes to Standing Orders
(Parliament’s rules), this 54th Parliament is the first to
have dedicated financial scrutiny weeks built into its
sitting calendar.

Picker said that before the Standing
Orders change, you would generally expect more rigourous
scrutiny in an election year, “but now you get it all three
years, which can only be good”.

Much of the public
attention during Scrutiny Weeks tends to focus on the more
political committee exchanges that generate headlines: the
grillings, interrogations and clashes. But Picker said much
of the work was more detailed and less theatrical than those
moments suggest, and proceedings were kept on track through
pre-prepared scrutiny plans.

“The useful thing about a
scrutiny plan is its ability to capture what committees are
really interested in scrutinising,” Picker says. “So it
becomes much less performative and much more in-depth.
Committees are able to say to agencies and ministers: these
are the areas we want to talk about in detail with you, and
then really drill down into those areas.”

He said the
process gave committees more focus than in the
past.

“Maybe previously, ministers and agencies didn’t
know what they were going to be asked when they went to a
hearing, and committee members maybe hadn’t had a discussion
in any great detail about what they planned to talk about…
there’s an element of performance in all politics, but now
there’s much more depth and richness to it.”

The
prospect of a change of government also raised questions
about how spending authority carried over from one
administration to the next.

“Government is continuous,
even though the parties or people who make it up might
change,” Wilson explained.

“There’s always a
government in New Zealand… after an election there might
be a period where it’s not clear who’s going to form the
government. The existing government stays in place in a
caretaker role.”

That meant spending approved by
Parliament continued, regardless of the outcome of the
election.

“The current government’s spending plans
continue because they were approved by Parliament, and it’s
Parliament that decides how that money is spent in the end.
An incoming government might want to make changes, and it
might legislate urgently to do that, but otherwise its big
opportunity to change things will be its first
budget.”

While an incoming government could
theoretically deliver an emergency-style budget soon after
taking office, Picker said that was not usually how
transitions work in practice.

“What they will often do
is come in and look at what levers within the existing
budget process they can push ahead of May.”

For
example, just because money had been appropriated as
available for spending by Parliament, that didn’t compel an
incoming government to spend all of it.

So while one
year’s spending plans were being scrutinised, departments
and ministers-potentially new ones were already laying the
groundwork for the next budget.

For many people, the
Budget felt like a single day or week in the political
calendar. In reality, it was only the most visible moment in
a process that stretches across years, and that this year,
stretches across parliaments.

*RNZ’s The
House, with insights into Parliament, legislation and
issues, is made with funding from Parliament’s Office of the
Clerk. 

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